The traditional real life auction in an auction room serves a single audience located together in a single place bidding for one or more items or articles. The auction occurs over a short time frame with a set of bids rising continuously until no-one is prepared to bid any further.
By contrast, auctions over the Internet enable remotely located people to participate together in a single auction. Because the Internet is a worldwide phenomenon it is not easy to get large numbers of interested parties to be on line at the same time. Rather, bids have to be gathered over a predefined time frame and then considered fairly.
Numerous patents deal with the question of managing such Internet auctions between remote bidders. Notably, U.S. Pat. No. 6,044,363, assigned to Hitachi Ltd, discloses an automatic auction method which reduces the need for bidders to remain at auction terminals throughout the duration of an auction and which makes possible auction transactions on an open network on which it is difficult to assure the on-line and real time properties. The method uses a plurality of auction ordering information units each containing a desired price, a maximum price the bidder is prepared to pay, and a number of times desired for purchase. The bids are received from bidder terminals via on-line circuits and a highest bid is determined. In the absence of bids, the price is lowered in stages until a successful bid is identified. If there is at least one successful bid but not all the items have been bid for, then further successful bids are sought by comparing a set price with the remaining available quantity and the highest remaining bid. Until the desired quantity is satisfied, the threshold for accepting bids is adjusted.
In the auction of this method, the bidder is asked to give a bid price and a highest acceptable price. Most bidders do not like to be asked for a highest acceptable price. Furthermore the use of such a highest acceptable price provides a mechanism for pushing up the price relatively rapidly.
The method does not provide a possibility of instant acceptance of a bid should this be required, or of a definite time by which a bidder can know for certain that his bid has been accepted or rejected, beyond the time defined as the end of an auction.
The method considers and accepts bids only at discrete intervals, thereby creating a dead time when no actual sales are possible.